Question

Glaston Company manufactures a single product using a JIT inventory system. The production budget indicates that the number of units expected to be produced are 203,000 in October, 211,500 in November, and 208,000 in December. Glaston assigns variable overhead at a rate of $0.80 per unit of production. Fixed overhead equals $160,000 per month. Compute the total budgeted overhead that would appear on the factory overhead budget for month of October.

Answer 1

$322,400

Step-by-step explanation:

The computation of the factory overhead budget is shown below:

As we know that

Factory Budgeted Over head = Budgeted variable overhead + Budgeted Fixed Overhead

Budgeted Variable Overhead = Overhead rate × Budgeted production

= $0.80 × 203,000

= $162,400

And,

Budgeted Fixed Overhead = $160,000

So, the factory overhead budget is

= $162,400 + $160,000

= $322,400